Russian bank VTB Group will stop service to its 2,000 clients in the US to comply with the requirements of the Foreign Account Tax Compliance Act (FATCA).
The move is aimed at minimizing the risks arising from the need to comply with FATCA that comes into force on 1 July 2014.
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VTB spokesman said: "VTB has registered with the US Internal Revenue Service (IRS) to comply with the FATCA and is ready to operate in accordance with it on its own. This refers to households and corporate bodies."
VTB guaranteed that the loss of US clients will not effect business performance or its financial indexes.
In addition, the bank has no plans to break its ties with US clients, but likely won’t prolong these agreements too. VTB has ceased to deal with new, and will slowly close down its operations with existing, American clients.
The head of the Association of Russian Banks said that Russian law and FATCA are incompatible and Russian banks will be able to comply with US law or Russian law, but not both.
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